Reserve Bank has authorised a few branches of each authorised dealer to conduct the business under Portfolio Investment Scheme on behalf of NRIs. They have to route the applications through any of the designated authorised dealer branches who have authorisation from Reserve Bank of India.

The repatriation of the sale proceeds are allowed if the original purchase was made on repatriation basis and the sources of investment were from NRE/FCNR account or by means of remittance from abroad. If the original purchase was made from NRO a/c then the sale proceeds are not repatriable

Yes. Investment can be made on repatriation as well as non-repatriation basis. However, the investor will have to open NRE account as well as NRO account with the Designated Bank. The sale proceeds of Non-repatriable investment can be collected in NRO A/c only.

As per recent RBI guidelines, NRI should have a separate bank account exclusively for PIS purposes. Transactions relating to their personal banking as well as on account of transactions relating to shares acquired other then under PIS including IPOs should be routed in a separate bank account not linked to PIS. Account/s can be of ‘joint’ type.

Yes. The Designated Bank will issue approval on receipt of prescribed form.

The application is to be submitted to a designated branch of an authorised dealer in India in the prescribed form. No permission is required from RBI. Authorised dealer issues general permission for a period of five years, which can be renewed further by designated branch, concerned for a period of five years at a time.

NRI can apply only at one Designated branch of bank for the purpose of routing the transactions under PIS.

No. NRI can select only one authorised dealer branch for the purpose of investment under Portfolio Investment Scheme and route the transactions through the branch designated by the authorised dealer.

Yes. The issuing company is required to issue shares to NRI on the basis of specific or general permission from GOI/RBI. Therefore, individual NRI need not obtain any permission.

The shares/convertible debentures acquired under IPO need not be routed through Designated Bank as this does not come under PIS. Such transactions, if routed through designated bank, should be done in a separate bank account not linked to PIS.

NO, NRIs can purchase shares in primary market on repatriable basis and application money can be paid through regular NRE SB account or through inward remittance

NO, NRIs can purchase shares in primary market on non-repatriable basis and application money can be paid through regular NRE/ NRO SB account or inward remittance.

No.

No.

Yes. NRI can purchase upto a maximum of five percent of the paid up capital of a company and maximum of five percent of paid up value of each series of debentures. For the purpose of this ceiling investment in repatriable and non-repatriable will be clubbed. In addition to above NRIs collectively can hold upto a maximum of 10% of such holding or any higher percentage so permitted in respect of any particular company. Shares/debentures acquired through primary market are excluded for the purpose of above limits

The orders need not be placed through the Designated Bank. Further, the reporting of the transaction shall be done to the Designated Bank on the same day of transaction along with original contract note. One needs to ensure that the payment and receipt of funds in settlement of such trade has to be routed through the Designated Bank account only.

Yes, It is mandatory for a NRI to route all secondary market transactions through his PIS designated account i.e For all purchase / sell of stocks in secondary market only the PIS designated account should be debited / credited.

No. NRI cannot sell without taking delivery of the shares/convertible debentures purchased. Short selling is not permitted under PIS.

NRI will have to off load such portion of the holding, which is in excess of the prescribed limit.

The NRI investor is not required to file any Return or Report with the RBI with regard to acquisition or sale of shares and/or debentures in an Indian Company. Only the link office of the designated bank branch is required to furnish a report on daily basis on Portfolio Investment Scheme Transactions to RBI.

No. An NRI must open separate Demat accounts for holding 'repatriable' and 'non-repatriable' securities.

Yes.

The sales proceeds can be deposited after deduction of the applicable tax.

As per Indian tax laws, all the capital gains arising out of sale transactions are subject to tax. In the case of NRIs, the capital gain arising out of sale transaction is subject to deduction of tax at source (TDS) i.e. at the time of crediting the sale proceeds to the respective NRE/NRO account by the concerned bank branch. Accordingly, the concerned bank shall determine the tax liability and tax will be deducted at source. The concerned bank, which has deducted tax at source, shall issue a certificate in this regard.

As per section 6(5) of FEMA, NRI can continue to hold the securities, which he/she had purchased as a resident Indian, even after he/she has become a non-resident Indian, on a nonrepatriable basis.

Yes. It is the responsibility of the NRI to inform the change of status to the designated authorised dealer branch, through which the investor had made the investments in Portfolio Investment Scheme and the DP with whom he/she has opened the demat account. Subsequently, a new demat account in the resident status will have to be opened, securities should be transferred from the NRI demat account to resident account and then close the NRI demat account.

Yes, NRI can receive shares in inheritance. RBI permission is not required and the shares will be held on non-repatriable basis.

The shares purchased through Primary / Secondary market as a resident will be held on nonrepatriation basis, once the customer becomes an NRI. These shares can be credited to NRO DEMAT account. These shares can be sold in secondary market without PIS permission. The sale proceeds can be credited to NRO SB account after payment of capital gain taxes.